States bicker over rental assistance amid Treasury reallocation

Total $2.3B to be moved this year, spurring disparity across state lines

Gene Sperling (Getty, iStock / Photo illustration by Priyanka Modi)
Gene Sperling (Getty, iStock / Photo illustration by Priyanka Modi)

Evidently, $46.5 billion of rental assistance is not enough to go around in the United States.

The Treasury Department has started reallocating funds from states with excess funds to states out of funds altogether. The Associated Press reported the reallocation has created winners and losers, along with political debates among lawmakers, tenant advocates and residents in some states.

According to the Treasury, $30 billion has either been spent or allocated through February. States have a mandate to cumulatively spend the first $25 billion by September and the remainder by 2025. To move things along, the Treasury is reallocating $1 billion from the first pot of assistance and $2.3 billion overall this year.

Big states like California and Texas are the ones generally receiving the reallocations, according to the AP. Smaller, Republican states with more rural residents and less renters are the ones largely losing money, like Montana and West Virginia.

Some of those states had an excess of funds and were able to return some with little issue.

Other states, however, have run into political battles. North Dakota and South Dakota have found themselves divided across parties; Democrats wanted to keep more money, while Republicans were ready to return the funds. South Dakota Gov. Kristi Noem even referred to the funds as “government hand-outs.”

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Tenant advocates want to keep the funds coming, especially for those who live in rural areas or may not have access to affordable housing. They’re facing claims from opponents, including Nebraska Gov. Pete Ricketts, that access to funding is an incentive for people not to work.

“We are trying to reallocate the best we can,” Gene Sperling, who is overseeing the coronavirus rescue package, told the AP.

Even states benefiting from the reallocation are left feeling unsatisfied. Last month, the Treasury said it would allocate $119 million for New York’s rent relief program, only 7 percent of the $1.6 billion Gov. Kathy Hochul requested.

“Every dollar is meaningful; however, this falls woefully short of meeting the financial struggles of the nation’s largest population of income-insecure renters,” said Joseph Strasburg, president of the Rent Stabilization Association.

[AP] — Holden Walter-Warner